A temporal exploration of resilience of renewable energy consumption to the energy-related uncertainty shocks in the US

Recently, there has been growing concern about the impact of uncertainties in the energy market as it undergoes a transition from traditional fossil fuels to renewable energy sources. This necessitates an investigation of how recently developed energy-related uncertainty influences renewable energy consumption from different sources. Therefore, the present study investigates the dynamic effect of the newly developed energy-related uncertainty index on renewable energy consumption in the US by employing the TVP–SV–VAR model, as this understanding can inform effective policy measures. Our findings indicate that the relationship between energy-related uncertainty and renewable energy consumption from different sources changes dynamically over time. While most renewables experienced negative shocks in the short term, wind energy remained resilient due to technological advancements and government incentives during the period. Solar energy also demonstrated resilience to the shocks from the energy-related uncertainty in comparison to the traditional sources of energy, e.g., geothermal, hydro, and biofuels in the short, medium, and long term during the post COVID-19 times, highlighting the era of expansion for solar energy consumption. In the medium term, wind energy consumption declined, reflecting market uncertainties driven by the 2008 financial crisis and inconsistent policy support. Between 2009 and 2017, global energy policy shifts contributed negatively for the renewables, both in the short and long term. Post-2020, geothermal and hydro energy showed a long-term negative trend in response to the uncertainty shocks. These findings suggest policymakers should encourage the adoption of solar and wind energy in the wake of increasing uncertainty in the energy sector.